11 Another thing to consider with 1098-T: if your child is claimed as your dependent, make sure you're coordinating who claims education credits. If you claim your child as a dependent, they can't claim their own education credits (like American Opportunity Credit) - YOU would claim those on your return, not theirs.

22 Don't forget about state filing requirements! Even if your child doesn't need to file a federal return, some states have lower thresholds for filing requirements. I learned this the hard way when my son got a letter from our state tax department asking where his return was, even though he was under the federal threshold.

Has anyone dealt with reporting this excess scholarship income when the student has no way to pay the taxes? My daughter's in this exact situation - scholarship exceeds tuition by $7200, but that money went directly to her housing which is already spent. She has no income or savings to pay the tax bill. Does she need to make estimated tax payments during the year?

This is such a common confusion for families! One thing that might help clarify the situation is understanding that even though your son is your dependent, the IRS views scholarship income as belonging to the student who received it, not the parents. This is different from other types of investment income that might be reported on the parent's return under certain circumstances. For the $6,800 excess, your son will need to file Form 1040 and report this amount on Line 1a as wages (with "SCH" written next to it to indicate scholarship income). Make sure to keep good records of what the scholarship was used for - the IRS may want documentation showing which expenses were qualified vs. non-qualified. Also, don't forget to check if your son might owe estimated taxes for next year if this scholarship pattern continues. Since there's no withholding on scholarship money like there is with regular wages, he might need to make quarterly payments to avoid underpayment penalties.

Has anyone considered the impact of living in a duplex on your ability to exclude gain when selling? From what I understand, you can only exclude gain on the portion you lived in under the primary residence exclusion ($250k single/$500k married).

Great question! I went through this exact situation when I purchased my duplex three years ago. The key thing to understand is that you'll be treating this as a mixed-use property - part personal residence, part rental business. For mortgage interest deductions, you'll allocate based on the percentage of the property used for each purpose (usually square footage). So if each unit is equal, 50% of your mortgage interest goes on Schedule A (subject to the $750k loan limit) and 50% goes on Schedule E as a rental expense (no limit). Don't forget about depreciation on the rental portion - that's a major tax benefit! You can depreciate 50% of the property's basis (excluding land) over 27.5 years. Also, make sure to track all expenses separately: utilities, maintenance, insurance, etc. The rental portion expenses are fully deductible against rental income. One tip: keep detailed records of your square footage calculations and any improvements made to each unit. The IRS may want to see your allocation method if audited. A simple floor plan with measurements works great for documentation. Since you're in the 35% bracket, the rental deductions will provide significant tax savings. Just remember that when you eventually sell, you'll have depreciation recapture on the rental portion and can only use the primary residence exclusion on your half.

idk if this helps but my accountant told me that for 2025 filing season there are specific delays with 1099-NEC processing due to some last minute tax law changes. something about gig work classification that congress changed in december. if you have self employment income like you mentioned that could be your issue for sure.

Just to add another perspective - if you're comfortable with it, you can also check the IRS.gov website directly under their "Forms and Instructions" section. They sometimes post notices about delayed forms that might not be immediately visible in tax software. For what it's worth, the 1099-NEC delay that others mentioned is very real. I'm a tax preparer and we got official notice from the IRS about this specific issue affecting gig workers. The February 15th date mentioned by Oliver is accurate based on the latest IRS communications we've received. In the meantime, you could prepare the rest of your return and just leave the self-employment section incomplete until the forms are ready. That way you won't have to re-enter all your other information when the time comes.

Great analysis! One additional consideration that might tip the scales further toward W2 - worker classification compliance. The IRS has been increasingly strict about proper classification, and if you're working at a single location, using their equipment, following their schedule, and doing work that's integral to their business, you likely meet the criteria for W2 employee status anyway. If the client company gets audited and the IRS determines you should have been classified as an employee, both you and the company could face penalties and back taxes. The company would owe the employer portion of FICA taxes they should have paid, plus penalties and interest. You'd potentially owe additional taxes if deductions were disallowed. Given that this is a standard office job at one location through a staffing agency, the W2 classification is not only financially better but also legally safer. The agency is likely offering the choice to shift some tax burden to you, but the risk/reward doesn't favor the 1099 option in your situation.

You're absolutely right to lean toward the W2 option! Your calculations look solid, and most folks in similar situations find W2 more beneficial financially. One thing I'd add - if you do end up with any 1099 work in the future, keep detailed records of everything. The IRS loves documentation, especially for home office deductions and business expenses. I learned this the hard way when I couldn't substantiate some deductions during an audit a few years back. For your current situation though, the W2 route gives you that employer FICA contribution (essentially free money), potential access to benefits, and removes the headache of quarterly estimated payments. Plus, if the contract doesn't get renewed, you'd likely be eligible for unemployment benefits as a W2 employee. The peace of mind alone is worth it - no worrying about whether you're setting aside enough for taxes or if your deductions will hold up under scrutiny. Sometimes the simpler path is the better path!